Brief Overview of PFML for Employers
Who and what do PFML cover?
Enacted in 2018, the Massachusetts PFML Act permits most W-2 and some 1099-MISC employees to take job-protected, paid leave from work for family or medical reasons, including to:
- Bond with a child in the first 12 months after the child’s birth, adoption, or foster care placement;
- Manage their own serious health condition;
- Care for a family member with a serious health condition;
- Care for a family member who is or was a member of the armed forces, National Guard or Reserves and developed or aggravated a serious health condition on active duty; or
- Manage family affairs when a family member is on duty in the armed forces, including the National Guard or Reserves.
PFML defines a “serious health condition” as a physical or mental condition that prevents an employee from doing their job for more than three consecutive days, and requires one of the following:
- An overnight stay in a medical facility;
- Two or more treatments by a health care provider within 30 days of whatever prevented the employee from doing their job; or
- At least one treatment by a health care provider within 30 days of whatever prevented the employee from doing their job, with plans for continued treatment, including prescriptions.
Self-employed individuals and others who are not automatically covered by PFML can opt into PFML. To be eligible for PFML, the employee must have earned a certain threshold income over the past four calendar quarters ($5,400 in 2021, and $5,700 in 2022), and at least 30 times more than their PFML benefit amount.
Certain types of employment that are excluded from the Massachusetts unemployment statute also are excluded from PFML, including:
- Work performed for a son, daughter, or spouse;
- If under 18, services performed for one’s father or mother;
- Work performed by inmates of penal institutions;
- Independent contractors;
- Employment in the railroad industry;
- Work provided by real estate brokers/salespeople and insurance agents/solicitors in commission only jobs;
- Newspaper sales and delivery by persons under age 18;
- Employment by churches and certain religious organizations; and
- Work done by of work-study students, student nurses and interns, work trainee programs administered by non-profit or public institutions.
Who pays for PFML benefits?
In 2020, covered employees—and employers—began contributing money from each paycheck to a statewide fund to pay for PFML leaves. Beginning in 2021, individuals could apply to the Massachusetts Department of Family and Medical Leave to receive benefits from the fund to replace at least a percentage of their weekly income.
Recent Changes to PFML Benefits, Contribution Rates, & Notices
The maximum weekly PFML benefit will increase starting January 1, 2022.
Generally, an employee’s benefit payment will be a percentage of their average weekly wages, as calculated by the Department. By October 1 of each year, the Department calculates and adjusts the maximum weekly paid benefit amount to ensure it is 64% of the average weekly wage in the Commonwealth. Because the average weekly wage in Massachusetts increased from $1,487.78 to $1,694.24 as of October, 1, 2021, the maximum weekly benefit that an employee can receive under PFML will increase from $850 to $1,084.31 starting January 1, 2022.
The amount an employee may receive from the Department is a floor, however, not a ceiling. Some Massachusetts employers have opted to create private plans that provide greater benefits to their employees than PFML. Other employers allow employees to receive PFML benefits with a “top off” by the employer to bring the employee up to their full salary for part or all of the leave period. The employer can only use a “top off” under a leave benefit policy, however, and cannot require an employee to use sick time, vacation time, or paid time off as the “top off.” No matter which approach an employer takes, however—whether it uses the state plan, a private plan or the “top off”—it must, at a minimum, comply with the standards under PFML.
Contribution percentages will decrease beginning January 1, 2022.
Employers must ensure that all contributions to PFML reach the Department, regardless of whether it is the employer’s or employee’s share. Beginning January 1, 2022:
- Employers with 25 or more covered individuals must remit 0.68% of eligible wages (in 2021, it was 0.75%), comprised of employee and employer shares. Of the total contribution, 0.56% of eligible wages must be for medical leave, and 0.12% of eligible wages must be for family leave. Of the medical leave contribution, the employer share is 0.336% of eligible wages and the employee share is 0.224% of eligible wages (in other words, the employer contributes 60% and the employee contributes 40%). The full 0.12% of eligible wages for the family leave contribution comes from the employee’s wages (that is, the employee contributes 100%).
- Employers with 25 or fewer covered individuals must remit 0.344% of eligible wages (in 2021, it was 0.378%), which is paid entirely from employees’ wages – there is no employer share. Of the total contribution, 0.224% of eligible wages must be allocated to medical leave and 0.12% of eligible wages must be for family leave.
Employers should contact their payroll providers to ensure timely compliance with these changes.
Employers must notify their employees of all changes.
Under the PFML, employers are required to notify their current and new employees of these updates. New employees should be notified of contribution rates and maximum benefit amounts within 30 days of hire and obtain signed acknowledgements of receipt. Finally, employers must display a poster informing employees of their PFML rights and benefits. The Department has published helpful notice and poster templates, in multiple languages, for employers with 25 or more employees and fewer than 25 employees, available at the following link: click here
Disclaimer: Please note that the above article is based on information published by the Massachusetts Department of Paid Family and Medical Leave as of December 16, 2021, which is available online but subject to change.